Investors are losing confidence and customers are unsure of what to do in the wake of diesel vehicles being targeted as the "main villain" for air pollution, especially in Delhi-NCR region, according to Maruti Suzuki India Chairman R C Bhargava.

Stating that growth of the industry and creation of jobs are likely to be adversely impacted due to targeting of diesel vehicles, he said India seems to be applying "western remedies for pollution to our problem".

Bhargava said the fundamental truth that dust is the major cause of pollution in National Capital Region (NCR) is often forgotten.

Citing a study by IIT Kanpur on sources of pollution in NCR, he said it found that cars are not a significant contributor to PM (particulate matter) 2.5 in NCR.

"Yet, going by what has been happening, cars and especially diesel cars, are being treated as main villain for our polluted air. Not only are the measures being enforced unlikely to make any significant difference to the air quality, but the growth of the industry, and creation of jobs are likely to be adversely impacted," he said.

In his address to shareholders in the company's Annual Report for 2015-16, Bhargava further said: "Investors are losing confidence, and customers are unsure of what to do."

He said in the west dust has never been a pollutant of significance but NOX is the main concern.

"However, we seem to be applying the western remedies for pollution to our problem, though the cause is entirely different," Bhargava added.

The positive factor, he said, "is that the government recognises the dangers of the situation, and is taking a firm stand in favour of growth, while dealing with the real pollution problem".

During 2015-16, he said the industry has faced one major challenge with environmentalists, media and the judiciary concerned over improving air quality in the NCR area and in other parts of India.

Stating that the auto industry is also equally concerned over pollution, Bhargava, however, said: "Finding the correct solution to any problem requires that the root cause of the problem is correctly diagnosed."

Last year in December, the Supreme Court had banned diesel cars and SUVs with engine capacity of 2,000 cc and above.

In April, the apex court had barred diesel taxis from plying in the NCR but later modified the order in May allowing those running on All India tourist permits (AITPs) to ply in NCR centered on Delhi until the expiry of their permits.